The Japan Bank for International Cooperation signed on June 24 a loan agreement, in project financing*1, totaling up to USD66 million (JBIC portion) with PT. Rajamandala Electric Power (REP), an Indonesian company invested by The Kansai Electric Power Co., Inc. (KEPCO), for financing the Rajamandala Hydro Power Plant Project. The loan is cofinanced with Mizuho Bank, Ltd., which brings the total cofinancing amount to about USD110 million. The loan is intended to finance the construction and operation of the run-of-the river hydro power plant with the capacity of 47 MW located in the Rajamandala on Citarum basin, Cianjur Regency, West Java Province, Indonesia. The electricity produced is going to be sold to PT. PLN (Persero) for 30 years. In Indonesia, the demand for electric power is expected to grow at 8.5% annually for the next ten years. The hydro power plant project, which KEPCO has been involved independently from its feasibility study stage and is also participating in as an investor, will be operated and managed for the long term with Japanese technology. The loan supports (financially) the participation of Japanese companies in overseas infrastructure projects and thereby will contribute to maintaining and strengthening the international competitiveness of Japanese industries. Also, this hydro power plant contributes to the reduction of CO2 discharge utilizing renewable energy, which is the effective head between two existing dam-type power stations, drawing the discharged water from the dam on the upper stream. As Japan's policy-based financial institution, JBIC will continue to support overseas business deployment of Japanese companies and contribute to maintaining and strengthening the international competitiveness of Japanese industries, by drawing on its various financial facilities and schemes for structuring projects, and performing its risk-assuming function.
*1 Project finance is a financing scheme in which repayments are made solely from cash flows generated by the project and secured only by the project assets.